State Consumer Disputes Redressal Commission
Hemant Sehgal & Anr. vs K.U. Sdalamuthu & Co. Ltd. & Anr. on 14 December, 2009
H H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA. ORIGINAL COMPLAINT NO.04/2009. RESERVED ON 30.11.2009. DATE OF DECISION: 14.12.2009 1. Sh. Hemant Sehgal Partner M/S Lords Fibre, Kala Amb, Nahan, District Sirmour, H.P. 2. Sh. Gagan Kapoor, Partner, M/S Lords Fibre, Kala Amb, Nahan, District Sirmour, H.P. Complainants. Versus 1. K.U. Sdalamuthu and Company Pvt. Ltd. Having its registered Office and Unit-1 at 428, Mettupalayam Road, Coimbatore-641 042 India. 2. K.S. Subramaniam Director M/S K.U. Sodalamuthu 428 Mettupalayam Road, Coimbatore-641043, India. Opposite parties. --------------------------------------------------------------------------------------------------------------- Honble Mr. Justice Arun Kumar Goel (Retd.), President Honble Mrs. Saroj Sharma, Member Honble Mr. Chander Shekhar Sharma, Member Whether approved for reporting? No For the Complainants: Mr. Rajesh Verma, Advocate, vice Shri Subhash Sharma, Advocate. . For the Opposite Mr. J.V. George Parties. Authorized representative. --------------------------------------------------------------------------------------------------------------- O R D E R
Justice Arun Kumar Goel (Retd.), President.
1. Facts giving rise to this complaint are that on 19.12.2005, discussion was held between OP No.1 represented by OP No.2 as its Director on one side as Seller AND Mr. Nitin Madan, Director, and Mr. Hemant Sehgal, representing M/S Lords Fibre, Kala Amb, Himachal Pradesh as buyer, on the other. In this context it may be mentioned that Nitin Madan is mentioned as Director, however at the time of hearing, it was submitted by Mr. Rajesh Verma, learned Counsel for the complainants that he was partner because M/S Lords Fibre was a Partnership firm. This according to him was a case of mis-description and it does not make any difference so far merits of the case are concerned. This discussion vide Annexure C.1 with the complaint was held between the OPs and complainant No.1 and Nitin Madan, for setting up of a Pulp Moulding Plant to make mainly Apple Trays and Egg Trays Model RM4 Upgradable to RM 8 in future.
2. Admittedly this discussion/meeting was held at Coimbatore. Amongst other things, it is mentioned in this Annexure that all machines were to be tested to the standard ISO testing norms before dispatch for its performance, quality, workmanship etc. If buyers representative wanted to be present during such trial, it was most welcome and encouraged. Total cost of basic plant and machinery Model RM4, Extra Multifuel system attachment, Cost of additional 3 batch of apple tray moulds together with packing and forwarding charges (lumpsum) was worked out at Rs.53,50,000/- and after Special discount final price agreed mutually by the parties was Rs.50,00,000/- plus taxes, duties, freight and other levies proposed by the Government at the time of dispatch.
3. This discussion was followed by quotation/proforma invoice No.178 annexed collectively as Annexure R.2, dated 20.12.2005 and proforma invoice No.178 (revised) dated 2.12.2006. As per Annexure R.5, before dispatch, machinery was properly checked by the Quality Control Department of OP No.1 at Coimbatore. Purchase order was sent by M/S Lords Fibre and payment terms were as per proforma invoice No.178 dated 20.12.2005. Reason for making this observation is that provisional invoice No.178, dated 2.12.2006 is revised one.
4. In terms of the discussion Annexure C.1, admittedly machinery after testing was dispatched from Coimbatore for being installed at factory premises of M/S Lords Fibre at Kala Amb. In terms of the discussion, though the seller charges 5% cost as erection, start-up, technical knowhow, service charges etc. as standard conditions, but as a special case for first 30 days, the erection team service was to be free including both ways train charges/air charges.
For additional days, an amount of Rs.500/- per day per person was to be charged extra for working 8 hours with 30 minutes lunch break. Additional hours were to be charged on pro-rata basis.
Additional hours service, work on holidays etc. could be offered depending upon the physical strength and ability of the erection team. For all the above days including free service days, buyer was to provide decent hotel accommodation on twin sharing basis besides providing food, local travel, medical, accident and any other expenses related to the visit and work.
5. Complaint file shows as also complainants admit that persons were deputed by the OPs for doing the needful who worked for 25 days out of agreed free period of 30 days. Due to electricity problem, the team went back and it returned on 15.4.2007. This position was also not disputed by Mr. Rajesh Verma on behalf of the complainants. According to the complainants, machine was still under observation stage when it was delivered on 12th & 13rd July, 2007.
It was under guarantee for a period of one year from the date of its delivery against fault. Machine was not giving the desired results as the required product was not coming out as per agreement. Reason being that it was churning out defective trays which were returned by the purchasers. In this background, alleging deficiency in service, complaint was filed claiming refund of Rs.55,10,386/- as total amount paid in advance because machine was not working due to defects in it. Interest on this amount at the rate of 12% per annum, transportation and installation charges as also damages to the extent of Rs.15,00,000/- were claimed.
6. When put to notice, OPs seriously contested and resisted this complaint. Stand of the OPs was that the complaint was bad for non joinder of firm with whom discussions were held at Coimbatore vide Annexure C.1. Besides this, machine was purchased for commercial activity to gain maximum profits, as such there was no consumer dispute between the parties. Shri Gagan Kapoor, complainant No.2 was running another Concern M/S Pulkit Industries, who had joined Complainant No.1, therefore it cannot be said to be a case of self employment for earning livelihood. As such the complainants were not consumers within the meaning of Section 2 (1) (d) of the Consumer Protection Act, 1986. Therefore the complaint was liable to be dismissed.
7. By way of preliminary objection, Mr. George, authorized representative (AR) on behalf of the OPs raised objection challenging the territorial jurisdiction of this Commission to entertain and try this complaint. In this behalf, he drew our attention to Annexure C.1, the minutes of discussion held at Coimbatore on 19.12.2005, as well as to the proforma invoide No.178 dated December 20, 2005, Annexure R.2, and urged that though he does not admit there was any deficiency of service and/or there exists any consumer dispute as envisaged under the Consumer Protection Act, 1986, however even if it be assumed for the sake of argument without conceding, jurisdiction if any is that of the Court of competent jurisdiction situated in Coimbatore only and not of any other Court. In this behalf he referred to Clause 18 which is on the reverse of Annexure R.2. Besides this, he again laid great emphasis on Annexure C.1, the minutes of discussions which were held at coimbatore. Machinery was to be tested before dispatch there and if representative of the complainant-firm wanted to be present during such trial, it was most welcome and encouraged. Thus, cause of action, if any, though none has accrued in favour of the complainants, was at Coimabatore, therefore this Commission lacked inherent jurisdiction to have dealt with this matter.
8. This position was seriously disputed by Mr. Rajesh Verma, learned Counsel for the complainants. Per him, after the machinery was installed at Kala Amb in the factory premises of his clients, defects were found which were brought to the notice of the OPs. Instead of removing those, they started demanding Rs.5,92,526/- besides issuance of C form regarding the transaction in question. When the machinery was not giving desired results when put into operation, this was a clear cut case of deficiency, therefore according to Mr. Rajesh Verma, learned Counsel for the complainants, his clients were entitled to the relief(s) claimed. He thus prayed for allowing this complaint. Regarding ouster clause, Mr. Verma pointed out that it only deals with the maintenance of a suit and not of complaint under the provisions of the Consumer Protection Act, 1986, therefore no advantage can be derived by the OPs from Clause 18 which is on the back side of quotation/proforma invoice No.178 dated 20.12.2005.
9. So far legal proposition regarding ouster clause is concerned, it is by now well settled and learned Counsel for the parties on legal proposition were one. According to both of them, where two Courts have concurrent jurisdiction to entertain and try a dispute between the parties, then by consent they can confer exclusive jurisdiction on one of such Courts by excluding the jurisdiction of the other Court.
10. When parties entered into such an agreement, they are well aware of as to what they are doing and above all, they are presumed to be alive to the situation that their intention is to confer jurisdiction on one Court alone. Therefore, their intention as well as will has to be respected by the Courts and thus given effect to in its letter and spirit besides their intendment.
11. Before this Commission in Original Complaint No.2/2008 titled as Rajat Kumar Versus L&T (Komatsu) Limited and others, decided on 16.6.2009, a question arose as to whether this Commission has jurisdiction to entertain and try a dispute between the parties when it was clearly mentioned in the invoice that it was subject to Bangalore jurisdiction only. While upholding plea of OP No.1 in this case, complaint was ordered to be returned to the complainant in that case for being presented before the appropriate Forum in accordance with law.
12. To similar effect is the decision of the Honble High Court of Himachal Pradesh in Arbitration Case No.358/2003, titled as Sanjay Jal Vidyut Nigam Ltd. (formerly known as Nathpa Jhakri Power Corporation Ltd.) Versus M/S Continental Foundation Joint Venture (CFJV), dediced on 13.4.2005.
After taking note of the ouster clause in the agreement, while accepting the plea of CFJV, objections were ordered to be returned to the Objector to be presented at Court at Delhi. Both, i.e the decision of the High Court as well as of this Commission is nearer to the facts of this complaint in the face of clause 18 printed on the back side of proforma invoice No.178, dated 20.12.2005, as also on the revised proforma invoice dated 2.12.2006.
13. Now we have to deal with the submission of Mr. Rajesh Verma with reference to ouster clause that it only deals with suits, whereas present complaint is not a suit, therefore even if ouster clause is there, it makes no difference in the facts and circumstances of this case and he prayed for examining the case on its merits.
With a view to advance his case, Mr. Verma drew our attention to a full bench judgment of the Lahore High Court in (Bhai) Kirpa Singh Versus Rasalldar Ajaipal Singh and others, A.I.R. 1928 Lashore 627. This was a case under Sikh Gurudwaras Act, 1925. While interpreting Sections 29 and 32 of the said Act, it was held that suit or proceedings must be construed in a narrow sense as signifying an action in the trial Court or proceedings ejusdam generis and cannot be held to include appeals. A perusal of this decision shows that it is purely distinguishable being on its own facts and litigation like the one before us under the Consumer Protection Act, 1986, is totally distinct from the proceedings under the Sikh Gurudwaras Act, 1925.
14. In a recent decision, Honble Supreme court has held in the case of N.Kannadasan Versus Ajoy Khose and others, 2009 CTJ 1198 (Supreme Court) (CP) that proceedings before the Fora under the Consumer Protection Act, 1986, are judicial in nature. This decision was given in the context of appointment of an Additional Judge of Madras High Court as President of the Madras State Commission. His tenure was not extended and it came to an end as Additional Judge only.
Thereafter, he joined as Additional Advocate General in the State Government. We are also alive to the fact that the Foras under the Consumer Protection Act, 1986 despite having all the trappings of a civil Court are not the civil Court and they do not hold civil proceedings. In case we uphold the contention urged by Mr. Rajesh Verma, it will be defeating the intention of the parties when complainant No.1 alongwith his other partner had accepted the proforma invoice No.178, dated 20.12.2005 preceded by discussions held at Coimbatore. So far erection of the machinery at Kala Amb in the factory premises of M/S Lords Fibre is concerned, it was follow up of the aforesaid minutes and the proforma bill. Testing etc. as already observed of the machinery to be supplied was in fact to be undertaken and had been so done by the OPs at Coimbatore.
15. In the light of the above discussion, we are satisfied that any other interpretation, than what was intended by the parties would not only be too pedantic, but technical too. Besides this, it will also be going against the intention of the parties of which they were very well aware. Here at the risk of repetition, reference needs to be made to Annexure R.3, dated 2.3.2006, purchase order placed by M/S Lords Fibre, Kala Amb with the OPs.
This order was also placed with them at Coimbatore as this letter is addressed to OP No.1 at its address there. It clearly refers to provisional invoice No.178 which was attached by the Firm with the said purchase order. Therefore, plea of Mr. Verma, learned Counsel for the complainants that ouster clause is meaningless and/or it covers civil suit alone and/or that the Foras within the State of Himachal Pradesh had the jurisdiction is being noted to be rejected.
16. Once this conclusion is arrived at, then the decision of this complaint need not detain us.
17. On the question of jurisdiction, no other point was urged. In this behalf we clarify and point out that since the complaint is being disposed of for want of inherent lack of jurisdiction in the face of ouster clause as contained in Annexure R.2, we have neither touched nor expressed any opinion, so far merits of the complaint are concerned.
In view of the aforesaid discussion, while upholding the objection urged on behalf of the OPs, it is held that this Forum has no jurisdiction to entertain the present complaint and jurisdiction if any is exclusively with the Foras at Coimbatore alone. Accordingly, the complaint is ordered to be returned to the complainants through their learned Counsel for being presented before appropriate Fora at Coimbatore. No costs.
Learned Counsel for the complainants has undertaken to collect copy of this order free of cost from the Court Secretary and the office is directed to send it to Shri J.V. George, B.Com., LLB., DLL., Legal Consultant/Authorized Agent, 90, R.R. Samy Lane, Ramnagar, Coimbatore 641 009 (Tamil Nadu), as prayed for by him after he had concluded the arguments.
Shimla, December 14, 2009.
( Justice Arun Kumar Goel ) (Retd.) President ( Saroj Sharma ) Member ( Chander Shekhar Sharma ) /BS/ Member